-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FiT92jl8w7ayFmrOJpTZM5ygABsI9hBCxOrO2zvecoaJwLU6GV/s897tdXS2fwT8 JX0Oas/GlUGTm2tgaigllQ== 0000896463-96-000070.txt : 19960702 0000896463-96-000070.hdr.sgml : 19960702 ACCESSION NUMBER: 0000896463-96-000070 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYMIX SYSTEMS INC CENTRAL INDEX KEY: 0000872443 STANDARD INDUSTRIAL CLASSIFICATION: 7372 IRS NUMBER: 311083175 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19024 FILM NUMBER: 96566323 BUSINESS ADDRESS: STREET 1: 2800 CORPORATE EXCHANGE DR CITY: COLUMBUS STATE: OH ZIP: 43231 BUSINESS PHONE: 6145237000 MAIL ADDRESS: STREET 1: 2800 CORPORATE EXCHANGE DR CITY: COLUMBUS STATE: OH ZIP: 43231 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended March 31, 1996 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to ____________________ Commission File Number 0-19024 Symix Systems, Inc. (Exact name of registrant as specified in its charter) Ohio 31-1083175 (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization) 2800 Corporate Exchange Drive Columbus, Ohio 43231 (Address of principal executive officer) (Zip Code) (614) 523-7000 (Registrant's telephone number, including area code) N/A (Former name, former address fiscal year, if changed since last report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO __ At May 13, 1996, there were 2,757,370 shares outstanding of the Company's Common Stock with a stated value per share of $.01. TOTAL OF SEQUENTIALLY NUMBERED PAGES: 47 EXHIBIT INDEX ON PAGE: 13 SYMIX SYSTEMS, INC. INDEX Part I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements Consolidated Balance Sheets ............................. 3 - 4 March 31, 1996 (unaudited) June 30, 1995 Consolidated Statements of Operations (unaudited) ....... 5 Three Months Ended March 31, 1996 and 1995 Nine Months Ended March 31, 1996 and 1995 Consolidated Statements of Cash Flows (unaudited) ....... 6 - 7 Nine Months Ended March 31, 1996 and 1995 Notes to Consolidated Financial Statements (unaudited) .. 8 Item 2. Management's Discussion and Analysis .................. 9 - 10 of Financial Condition and Results of Operations Part II. OTHER INFORMATION ............................................ 11 Item 6. Exhibits and Reports on Form 8-K ...................... 11 SIGNATURE ...................................................... 12 -2- SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) March 31, June 30, 1996 1995 ---------- --------- (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents ............................... $ 6,393 $ 4,498 Trade accounts receivable, less allowance for doubtful accounts of $502,000 at March 31, 1996 and $550,000 at June 30, 1995 ......................... 9,900 10,917 Inventories ............................................. 446 272 Prepaid expenses ........................................ 378 296 Other receivables ....................................... 205 153 Refundable income taxes ................................. 237 Deferred income taxes ................................... 284 337 ------- ------- TOTAL CURRENT ASSETS ............................... 17,606 16,710 OTHER ASSETS Purchased and developed software, net of accumulated amortization of $3,822,000 at March 31, 1996 and $3,150,000 at June 30, 1995 ....................... 4,558 2,531 Deferred income taxes ................................... 921 892 Deposits and other assets ............................... 434 552 ------- ------- 5,913 3,975 EQUIPMENT AND IMPROVEMENTS Furniture and fixtures .................................. 2,242 2,235 Computer and other equipment ............................ 7,555 6,713 Leasehold improvements .................................. 1,187 1,190 ------- ------- 10,984 10,138 Less allowance for depreciation ......................... 6,109 4,754 ------- ------- 4,875 5,384 ------- ------- TOTAL ASSETS .......................................... $28,394 $26,069 ======= ======= See notes to consolidated financial statements -3- SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (in thousands) March 31, June 30, 1996 1995 --------- -------- (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses ........... $ 3,394 $ 3,908 Customer deposits ............................... 517 670 Deferred revenue ................................ 5,603 5,571 Income taxes payable ............................ 375 Current portion of lease obligations ............ 180 198 Current notes payable ........................... 500 -------- -------- TOTAL CURRENT LIABILITIES ................ 10,569 10,347 LEASE OBLIGATIONS, less current portion ............ 137 DEFERRED INCOME TAXES .............................. 1,469 1,077 SHAREHOLDERS' EQUITY Common stock, authorized 5,000,000 shares; issued 2,909,470 shares at March 31, 1996, and 2,874,564 at June 30, 1995; at stated capital amounts of $.01 per share ............ 29 29 Capital in excess of stated value ............... 10,976 10,643 Retained earnings ............................... 6,671 5,156 -------- -------- 17,676 15,828 Less: Cost of common shares in treasury, 152,100 shares at March 31, 1996 and June 30, 1995, at cost .................... (1,320) (1,320) -------- -------- TOTAL SHAREHOLDERS' EQUITY ................ 16,356 14,508 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ..................... $ 28,394 $ 26,069 ======== ======== See notes to consolidated financial statements -4- SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands) (unaudited) Three Months Nine Months Ended March 31, Ended March 31, --------------- --------------- 1996 1995 1996 1995 ---- ---- ---- ---- License fees ....................... $ 5,988 $ 5,466 $17,177 $ 18,625 Service, maintenance and support ... 5,177 5,147 15,378 12,996 ------- -------- ------- -------- Net revenue ................... 11,165 10,613 32,555 31,621 License fees ....................... 1,565 1,892 4,839 5,629 Service, maintenance and support ... 2,193 2,145 6,286 5,812 ------- -------- ------- -------- Cost of revenue ............... 3,758 4,037 11,125 11,441 ------- -------- ------- -------- Gross margin ............... 7,407 6,576 21,430 20,180 ------- -------- ------- -------- Selling, general and ............... 5,410 6,101 15,897 19,037 administrative Research and product development ... 968 945 2,587 2,679 Restructuring and other unusual .... 506 charges ------- -------- ------- -------- Total expenses ............. 6,378 7,046 18,990 21,716 ------- -------- ------- -------- Operating income (loss) .... 1,029 (470) 2,440 (1,536) Interest and other income, net ..... 46 148 161 233 ------- -------- ------- -------- Income (loss) before provision (benefit) for income taxes ....... 1,075 (322) 2,601 (1,303) Provision (benefit) for income ..... 430 (123) 1,041 (509) taxes ------- -------- ------- -------- Net income (loss) .......... $ 645 ($ 199) $ 1,560 ($ 794) ======= ======== ======= ======== Earnings (loss) per share .. $ 0.23 ($ 0.07) $ 0.56 ($ 0.29) ======= ======== ======= ======== Weighted average number of common and common equivalent shares outstanding .............. 2,857 2,696 2,786 2,748 ======= ======== ======= ======== See notes to consolidated financial statements -5- SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended March 31, ----------------- (unaudited) 1996 1995 ------ ------ OPERATING ACTIVITIES Net income (loss) .................................... $ 1,560 ($ 794) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization ...................... 2,035 1,886 Provision for losses on accounts ................... (48) 50 receivable Provision for deferred income taxes ................ 416 (180) Changes in operating assets and liabilities: Trade accounts receivable .......................... 1,093 511 Prepaid expenses and other receivables ............. (134) (145) Inventory .......................................... (174) 63 Deposits ........................................... 118 (60) Accounts payable and accrued expenses .............. (514) 18 Customer deposits .................................. (153) 314 Deferred revenue ................................... 32 669 Income taxes payable/refundable .................... 612 (372) Notes payable ...................................... 500 ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES ............................... 5,343 1,960 See notes to consolidated financial statements -6- SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands) Nine Months Ended March 31, -------------------- (unaudited) 1996 1995 ---- ---- INVESTING ACTIVITIES Purchase of equipment and improvements ....... (854) (2,098) Additions to purchased and developed ......... (2,699) (950) software ................................... ------ ------ NET CASH USED IN INVESTING ACTIVITIES ......................... (3,553) (3,048) FINANCING ACTIVITIES Principal payments on long-term obligations .................................... (154) (171) Proceeds from issuance of common stock and exercise of stock options ............ 333 21 Purchase of treasury stock ....................... (767) ------- ------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ........................ 179 (917) Effect of exchange rate changes .............. (74) 11 on cash ------- ------- Net Change in Cash ........................... 1,895 (1,994) Cash at beginning of period ...................... 4,498 6,530 ------- ------- CASH AT END OF PERIOD ........................ $ 6,393 $ 4,536 ======= ======= See notes to consolidated financial statements -7- SYMIX SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note A -- Accounting Policies and Presentation The accompanying consolidated financial statements are unaudited; however, the information contained herein reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim periods. All adjustments made were of a normal recurring nature. These interim results of operations are not necessarily indicative of the results to be expected for a full year. The notes to the consolidated financial statements contained in the Symix Systems, Inc and Subsidiaries' June 30, 1995 Annual Report to Shareholders should be read in conjunction with these financial statements. Reclassifications -- Certain fiscal 1995 amounts have been reclassified to conform to the current period presentation. Note B -- Restructuring and Other Non-Recurring Charges The restructuring and other non-recurring charges of $506,000 were incurred during the quarter ended September 30, 1995 with costs associated primarily with severance payments and reorganizing the European sales channel. -8- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company's revenues are derived from (i) licensing SYMIX software and (ii) providing product support and related services. Product support is provided pursuant to agreements that are generally renewed annually. Related services consist of installation, implementation, training, consulting, programming and systems integration services for SYMIX users. The Company's results of operations have fluctuated on a quarterly basis. The Company's expenses, with the principal exception of sales commissions and certain components of cost of revenue, are generally fixed and do not vary with revenue. As a result, any shortfall of actual revenue in a given quarter would adversely affect net earnings for that quarter by a significant portion of the shortfall. Results of Operations Net revenue was $11,165,000 for the three months ended March 31, 1996, an increase of 5% from the same quarter of the previous year. License revenue increased 10% from $5,466,000 for the same quarter last year to $5,988,000 at March 31, 1996. This increase is primarily attributable to the increase in the SYMIX software component of license fee revenue. Service and support revenue were relatively consistent comparing the respective quarters' performance: $5,177,000 for March 31, 1996, and $5,147,000 for March 31, 1995. International revenues were comparable as well comprising 13% of net revenue for both quarters. For the nine months ended March 31, 1996, net revenue increased 3% to $32,555,000 from $31,621,000 for the same period last year. The increase was due to the growth in service revenue up 18% from the comparable period. Cost of revenue declined from 38% of net revenue for the quarter ended March 31, 1995 to 34% in the current quarter. For the nine month period the comparison results are similar, a slight decrease from 36% for the nine month period ended March 31, 1995, to 34% for the period ended March 31, 1996. Included in last year's third quarter cost of license fees is a special charge of $154,000 for write-off of previously capitalized software development costs. This accounts for a portion of the decline in the costs of revenue for the comparable period. Selling, general and administrative (SG&A) expense was $5,410,000 for the quarter ended March 31, 1996, compared to $6,101,000 for the same time last year, an 11% decline. For the respective nine month periods, SG&A expense was $15,897,000 compared to $19,037,000, a decline of 16%. This decrease is primarily due to more emphasis on controlling expenses and lower than planned headcount during the current fiscal year. Additionally last year's third quarter results included special charges of $171,000 related to staff realignments and cost control measures. Research and product development (R&D) expenditures, including amounts capitalized for the three months ended March 31, 1996, were $1,327,000 compared to $1,331,000 for the same period last year. For the nine months ended March 31, 1996, R&D expenses were $4,286,000 compared to $3,629,000 for the same period last year. Capitalization of software development costs was $359,000 and $1,699,000 for the three and nine month periods, respectively, ended March 31, 1996, compared to $386,000 and $950,000 for the comparable periods last year. In addition to the software development costs capitalized this quarter is $1,000,000 for a purchase of existing technology. The technology purchase aside, the increase in R&D expenditures for the nine month period is attributable to the release of SYMIX Version 5.0. The new release occurred in late March of 1996. -9- Liquidity and Capital Resources At March 31, 1996, the Company had working capital of $7,037,000 including cash and cash equivalents of $6,393,000, compared to $6,363,000 including cash and cash equivalents of $4,498,000 at June 30, 1995. Net accounts receivable decreased from $10,917,000 at June 30, 1995, to $9,900,000 at March 31, 1996. At March 31, 1996, the accounts receivable days sales outstanding were 81 compared to 97 at June 30, 1995. The Company anticipates that existing sources of liquidity and cash flow from operations will be sufficient to satisfy its operational objectives for the next twelve months. -10- PART II OTHER INFORMATION Item 1. Legal Proceedings ............................................ None Item 2. Changes in Securities ........................................ None Item 3. Defaults Upon Senior Securities .............................. None Item 4. Submission of Matters to a Vote .............................. None of Security Holders Item 5. Other Information ............................................ None Item 6. Exhibits and Reports on Form 8-K a) Index to Exhibits ...................................... Page 13 b) Reports on Form 8-K .................................... None -11- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SYMIX SYSTEMS, INC. Date: May 14, 1996 /s/ Lawrence W. DeLeon ---------------------- Lawrence W. DeLeon Vice President, Chief Financial Officer and Secretary -12- INDEX TO EXHIBITS Exhibit No. Description Page 3(a) Amended Articles of Incorporated herein by Incorporation of reference to Exhibit 3(a) Symix Systems, Inc. to the Registration Statement on Form S-1 of Registrant filed February 12, 1991 (Registration No. 33-38878) 3(b) Amended Regulations of Incorporated herein by Symix Systems, Inc. reference to Exhibit 3(b) to the Registration Statement on Form S-1 of Registrant filed February 12, 1991 (Registration No. 33-38878) 10(a) Symix Systems, Inc. ...................... 14 Non-Qualified Stock Option Plan for Key Executives 10(b) Employment Agreement between ............. 23 the Company and Stephen A. Sasser. 10(c) Stock Option Agreement between ........... 36 the Company and Stephen A. Sasser dated January 17, 1996. 11 Computation of Per Share Earnings ........ 46 27 Financial Data Schedule .................. 47 -13- EX-10.1 2 Exhibit 10(a) SYMIX SYSTEMS, INC. NON-QUALIFIED STOCK OPTION PLAN FOR KEY EXECUTIVES Article One Purpose The purpose of this Symix Systems, Inc. Non-Qualified Stock Option Plan For Key Executives (the "Plan") is to secure the benefits which accrue from a program of offering to the Key Executives of Symix Systems, Inc. (the "Company") and any Subsidiary the opportunity to acquire and increase their proprietary interest in the success of the Company and thereby to attain the objectives of this Plan which are: (1) To obtain and retain the services of Participants; (2) To encourage and reward efficient and profitable operation; and (3) To promote the development of the business of the Company. Article Two Definitions For purposes of the Plan, the following terms when capitalized shall have the meaning designated herein unless a different meaning is plainly required by the context. Where applicable, the masculine pronoun shall mean or include the feminine, and the singular shall include the plural. (a) "Board of Directors" shall mean the Board of Directors of the Company. -14- (b) "Committee" shall mean the Compensation Committee of the Board of Directors, whose membership shall be determined as provided under Article Four. (c) "Common Shares" shall mean the Common Shares of the Company. (d) "Company" shall mean Symix Systems, Inc., an Ohio corporation. (e) "Director" shall mean a member of the Board of Directors of the Company. (f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time, or any successor statute. (g) "Key Executives" shall mean executive officers of the Company or a Subsidiary who, in the opinion of the Committee, have demonstrated a capacity for contributing in a substantial measure to the success of the Company. (h) "Participant" shall mean a Key Executive selected by the Committee to receive stock options under the Plan. (i) "Plan" shall mean the Symix Systems, Inc. Non-Qualified Stock Option Plan for Key Executives as herein set forth. (j) "Securities Act" shall mean the Securities Act of 1933, as amended. (k) "Subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of any options under the Plan, each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. -15- Article Three Shares Subject to the Plan 200,000 of the Company's authorized but unissued Common Shares shall be reserved for the purpose of granting options under the Plan to Key Executives, in each case at a price set by the Committee at the time of the granting of an option and upon such other terms and conditions as the Committee might impose. In the event that options granted under the Plan shall terminate, any shares covered thereby and not purchased thereunder may again be the subject of an option under the Plan. Article Four Administration The Plan shall be administered by the Committee. The Committee shall consist of two or more Directors, as the Board of Directors may determine. The Board of Directors may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed. Subject to the express provisions of the Plan, the Committee may determine the individuals to whom and the time or times at which options shall be granted, the number of shares to be subject to each option, the period of each option, the vested rights of each Participant in his options (including the vesting schedule and acceleration of exercise of such options) and other terms and conditions thereof and shall report its determination to the Board of Directors. The proper officers of the Company shall carry such determination into effect, but no action of the Committee or of an officer of the Company shall bind or become binding upon the Company or create any obligation of the Company whatsoever unless and until the Company shall have entered into a written and definitive contract with a proposed Participant in respect of an option for the purchase of shares of the Company and no such contract shall obligate the Company to any person other than the Participant who is a party to such written -16- contract and to such persons, if any, as shall be expressly named or provided for in such written contract. The Committee is authorized to construe and interpret the Plan, to promulgate, amend and rescind rules and regulations relating to the implementation of the Plan and to make all other determinations necessary or advisable for the administration of the Plan. The Committee may designate persons other than members of the Committee to carry out its responsibilities under such conditions and limitations as it may prescribe, except that the Committee may not delegate its authority with regard to selection for, participation of and the granting of options to persons subject to Section 16(a) and 16(b) of the Exchange Act. Any determination, decision or action of the Committee in connection with the construction, interpretation, administration, or application of the Plan shall be final, conclusive and binding upon all Participants and any person validly claiming under or through Participants. Article Five Eligibility Options may be granted only to those Key Executives as may from time to time be designated by the Committee. Neither the provisions of the Plan nor its adoption by the Board of Directors or the Committee shall be deemed to give any person a contractual or other right to receive an option under the Plan. -17- Article Six Option Price The purchase price pursuant to which Common Shares may be purchased under each option granted hereunder shall be fixed by the Committee. Article Seven Term of Option The term of each option shall be fixed by the Committee, but in no event shall any option permit the purchase of shares thereunder after the tenth (10th) anniversary of the date on which the option is granted. Article Eight Exercise of Option Subject to the provisions of the written option agreement pursuant to which it is granted, an option may be exercised by giving to the Company notice in writing (in such form as may from time to time be specified by the Committee) stating the number of Common Shares subject to the option in respect of which it is being exercised, accompanied by a check or cash in full payment of all Common Shares in respect of which the option is being exercised. Each such notice of exercise of an option shall be delivered to the Chief Financial Officer of the Company. The Company shall have a reasonable time after receipt of any such notice in which to make delivery of share certificates for the Common Shares in respect of which an option is exercised. Notwithstanding the foregoing, no option shall be exercisable during the first six (6) months after the date such option is granted except in the case of death or disability. -18- Article Nine Termination of Service In case a Participant shall cease to be a Key Executive for any reason, within ninety (90) days next succeeding such termination, but not later than ten (10) years from the date of grant of the option, the Participant (or the executor or administrator of his estate) may exercise such vested option rights as he has under this Plan as of the date of such termination. Options not exercised within the period set forth in the preceding sentence shall thereupon expire and shall not be exercisable thereafter. Article Ten Non-Transferability of Option No option granted under this Plan shall be transferable otherwise than by will or the laws of descent and distribution and an option may not be exercised during the lifetime of a Participant except by him or by his guardian or legal representative. Article Eleven Adjustments In the event of any change in the outstanding Common Shares by stock dividend, stock split-up, stock combination, reclassification, recapitalization, merger, reorganization or other change in the Common Shares, the Committee, upon the advice of accountants and counsel for the Company, shall determine appropriate adjustments, if any, to be made in the number of Common Shares and the prices per share in respect of Common Shares subject to outstanding options and the number of Common Shares then reserved for options which may thereafter be granted. -19- Article Twelve Amendment and Termination of the Plan The Company, by action of the Board of Directors or the Committee, reserves the right to amend, modify or terminate this Plan at any time without shareholder approval. Article Thirteen Restrictions and Compliance With Securities Laws Anything contained in the Plan or elsewhere to the contrary notwithstanding: (1) No option granted under the Plan shall be exercisable for the purchase of any Common Shares subject thereto except for: (A) Common Shares subject thereto which at the time of such exercise and purchase are registered under the Securities Act, or which, upon the completion of such exercise, would be issued in a transaction exempt from registration under the Securities Act; and (B) Common Shares subject thereto which at the time of such exercise and purchase are exempt or are the subject matter of an exempt transaction, are registered by description, by coordination, or by qualification, or at such time are the subject matter of a transaction which has been registered by description, all in accordance with Chapter 1707 of the Ohio Revised Code, as amended; and (C) Common Shares subject thereto in respect of which the laws of any state applicable to such exercise and purchase have been satisfied. (2) If Common Shares subject to an option are sold and transferred upon the exercise thereof to a person who (at the time of such exercise or thereafter) controls, is controlled by or -20- is under common control with the Company, or are sold and transferred in reliance upon an exemption claimed in respect of the Securities Act, then upon such sale and transfer; (A) such Common Shares shall not be transferable by the holder thereof, and neither the Company nor its transfer agent or registrar, if any, shall be required to register or otherwise to give effect to any transfer thereof and may prevent any such transfer, unless the Company shall have received an opinion from its counsel to the effect that any such transfer would not violate the Securities Act or the applicable laws of any state; and (B) the Company shall cause each share certificate evidencing such Common Shares to bear a legend reflecting applicable restrictions on the transfer thereof and may use the following or any other appropriate legend for that purpose: SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES LAWS, ARE RESTRICTED SECURITIES WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE ACT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ENCUMBERED OR DISTRIBUTED EXCEPT PURSUANT TO (1) AN EFFECTIVE REGISTRATION STATEMENT REGISTERING THE SHARES UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES LAWS OR (2) UNTIL THE COMPANY HAS RECEIVED AN OPINION FROM ITS COUNSEL TO THE EFFECT THAT SUCH TRANSFER DOES NOT VIOLATE THE ACT OR THE APPLICABLE SECURITIES LAWS OF ANY STATE. (3) Nothing contained in the Plan or elsewhere shall be construed to require the Company to take any action whatsoever to make exercisable any option granted under the Plan or to make transferable any Common Shares issued upon the exercise of any such option. -21- Article Fourteen Tax Withholding Any person exercising an option shall be required to pay to the Company the amount of any taxes the Company is required by law to withhold with respect to the exercise of such option. Such payment shall be due on the date the Company is required by law to withhold such taxes. In the event that such payment is not made when due, the Company shall have the right to deduct, to the extent permitted by law, from any payment of any kind (but only as permitted by Rule 16b-3 of the Exchange Act for persons subject to Section 16 of the Exchange Act) otherwise due to such person from the Company all or part of the amount required to be withheld. -22- EX-10.2 3 Exhibit 10(b) EMPLOYMENT AGREEMENT THIS AGREEMENT, is made to be effective as of July 5, 1995, between Symix Systems, Inc., an Ohio corporation (the "Company") and Stephen A. Sasser ("Employee"). In consideration of the promises of the parties and of the mutual advantages and benefits expected to be derived hereunder, the Company and Employee, each intending to be legally bound, hereby agree as follows: 1. Employment. The Company hereby employs Employee and Employee hereby accepts such employment upon the terms and conditions hereinafter set forth. 2. Term. The Term of this Agreement shall be for a period of four (4) years commencing on the effective date hereof (the "Original Term"), unless sooner terminated pursuant to paragraph 10 hereof. Thereafter, unless sooner terminated pursuant to paragraph 10 hereof, the Term of this Agreement automatically shall be extended for additional, consecutive one-year Terms (each, an "Extended Term") unless, in accordance with paragraph 14 of this Agreement, (i) at least one hundred and fifty (150) days prior to the expiration of the Original Term or any Extended Term, the Company gives notice to Employee that the Company does not wish to extend the Term of this Agreement, or (ii) at least one hundred and twenty (120) days prior to the expiration of the Original Term or any Extended Term, Employee gives notice to the Company that Employee does not wish to extend the Term of this Agreement. The Original Term, together with any Extended Terms, is hereinafter sometimes referred to as the "Term." 3. Compensation and Other Benefits. Employee's compensation and other benefits during the Term shall be as follows: (a) Base Salary. Employee shall receive an annual base salary of not less than $220,000 (the "Base Salary") to be paid semi-monthly in equal installments. The Base Salary shall be reviewed not less frequently than annually and shall be subject to such upward adjustments as the Compensation Committee (the "Compensation Committee") of the Board of Directors of the Company (the "Board") may deem appropriate in its discretion. (b) Incentive Compensation. During the Term of this Agreement, Employee shall be entitled to additional compensation pursuant to a bonus plan to be approved by the Compensation Committee and to be consistent with this paragraph 3(b). Employee's annual target bonus will be $180,000, of which 80% ($144,000) will be earned if and to the extent the Company's earnings per share achieve targets proposed annually by Employee and approved by the Compensation Committee and 20% ($36,000) will be earned if and to the extent the Company achieves other strategic objectives proposed annually by Employee and approved by the Compensation Committee. -23- (c) Benefits. During the Term: (i) If and so long as the Company can purchase insurance on Employee's life at standard rates for his age, the Company, at its expense, shall provide and maintain for Employee a policy of insurance on Employee's life in an amount equal to $1,000,000, the proceeds of which policy shall be payable to one or more beneficiaries designated by Employee or, if Employee fails to so designate a beneficiary, to his estate; (ii) The Company, at its expense, shall provide and maintain for Employee a policy of long-term disability insurance providing for an annual benefit to him of not less than $250,000; (iii)Employee shall be entitled to receive such perquisites, fringe benefits and reimbursement of expenses historically provided by the Company to its executive officers; (iv) Employee shall be entitled to participate in any qualified employee benefit plans provided by the Company at the effective date of this Agreement (including, without limitation, the Company's 401(k) Profit Sharing Plan) or established by the Company, its successors or assigns at any time during the Term, subject to eligibility and enrollment requirements of such plans; (v) The Company shall pay all medical costs and expenses incurred by Employee in connection with growth hormone therapy for his son; and (vi) Employee shall be entitled to receive all other employees benefits [including, without limitation, medical, dental, group life (to the extent the coverage is superior to that provided for in paragraph 3(c)(i) above), long-term disability and accidental death insurance benefits] as are or in the future may be provided by the Company to its executive officers. 4. Duties. Employee is engaged as the President and Chief Operating Officer of the Company and hereby promises to perform and discharge well and faithfully these and such other duties which may be assigned to him from time to time by the Board of Directors of the Company. Employee shall serve as a director of the Company and as an officer or director (or both) of any of its subsidiaries and affiliates if elected as such. 5. Extent of Services. Employee shall devote his entire working time, attention and energies to the business of the Company and shall not, during the Term of this Agreement, be engaged in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage; but this Agreement shall not be construed as preventing Employee from investing his personal assets in businesses which do not compete or do business with the Company in such form or manner as will not require any services on the part of the Employee in the operation of the affairs of the businesses in which such investments are made and -24- in which his participation is solely that of an investor. Not- withstanding any provision of this Agreement to the contrary, Employee may: (a) purchase securities in any corporation or other business entity so long as such purchases do not result in Employee owning beneficially at any time 10% or more of the equity securities of any corporation or ownership interests of any other business entity doing business with the Company or engaged in any business from which the Company derives a Majority of the Company's Business; and (b) serve on the board of directors or comparable governing body of any corporation or other business entity which neither does business with the Company nor engages in any business from which the Company derives a Majority of the Company's Business. For purposes of this paragraph 5, a "Majority of the Company's Business" means any business from which the Company derives a majority of its business measured as a percentage of annual gross revenues in the Company's tax year during which the term of this Agreement began. 6. Covenant Not to Compete or Solicit. (a) Non-Competition. Employee agrees that, without the prior written consent of the Company, during the Term of this Agreement and for a period of one (1) year dating from the date Employee ceases to be employed by the Company, whether Employee's termination was voluntary or involuntary, he will not, directly or indirectly, as a sole proprietor, member of a partnership or limited liability company, officer or director of a corporation, stockholder or investor (other than holding not more than ten percent (10%) of the voting equity securities of a corporation or ownership interests of any other business entity), or as an employee, agent, associate or consultant of any person, firm or corporation, (i) engage in the operation of any enterprise which manufactures, sells or distributes any software products, or offers any service, in the United States that is competitive with a Majority of the Company's Business, or (ii) solicit business which is substantially the same as a Majority of the Company's Business from any customer of the Company or from any former customer of the Company who was such within two (2) years prior to such solicitation or from any potential customer or prospect listed in the Company's books and records as such and who has been actively solicited by the Company within six (6) months prior to the date that Employee ceases to be employed by the Company. Nothing contained in this paragraph 6(a) shall prohibit Employee from engaging in activities as permitted under paragraph 5 above or, during the one (1) year period dating from the date Employee ceases to be employed by the Company, from being employed by any person or entity which does not, directly or indirectly, engage in any business in the United States that is competitive with any manufacturing-based software product or related service sold, distributed or offered by the Company in the United States. (b) Non-Solicitation of Employees. Employee further agrees that he will not, for a period of one (1) year dating from the date Employee ceases to be employed by the -25- Company, solicit any employee of the Company to terminate the employee's employment with the Company under any circumstances. (c) Severability. It is the desire and intent of the parties that the provisions of this paragraph 6 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this paragraph 6 shall be adjudicated to be invalid or unenforceable, this paragraph 6 shall be deemed amended to delete therefrom the portion adjudicated to be invalid or unenforceable, such deletion to apply only with respect to the operation of this paragraph in the particular jurisdiction in which such adjudication is made. 7. Confidential Information. Employee recognizes and acknowledges that the Company's trade secrets and confidential or proprietary information, including but not limited to information of the Company concerning operations, customers or prospects, terms and conditions of sale and prices, technical knowledge relating to customer requirements, and knowledge of markets for the Company's products, as such trade secrets or information may exist from time to time, are valuable, special and unique assets of the Company's business, access to and knowledge of which are essential to the performance of the duties of Employee. Employee will not, during or at any time after Employee's employment with the Company, in whole or in part, disclose such secrets or confidential or proprietary information to any person, firm, corporation, association or other entity (except the Company) under any circumstances. 8. Ownership of Inventions, Patents or Innovations. Employee agrees to communicate to the Company, promptly and fully, and to assign to the Company all inventions and technical or business innovations, including, but not limited to, any computer products developed or conceived solely by Employee, or jointly with others, during the Term hereof, which are within the scope of the Company's business as conducted on the effective date of this Agreement or at any time during the Term hereof, or which were developed on Company time, or which utilized Company equipment, materials or information. Employee further agrees to execute all necessary papers, and otherwise to assist the Company, at the Company's sole expense, to obtain patents or other legal protection as the Company deems fit, both during and after Employee's Term of employment with the Company. Any such inventions and technical or business innovations, and any such computer products, are to be the property of the Company, and Employee shall have no proprietary interest therein.. All original works of authorship written or authored solely by Employee, or jointly with others, during the Term of Employee's employment, which are within the scope of the Company's business, or which were written on Company time, shall be works made for hire as defined in Section 101 of Title 17, United States Code, and the copyright therein shall vest in the Company. 9. Injunctive Relief. If there is a breach or threatened breach of the provisions of Paragraphs 6 or 7 or 8 of this Agreement, the Company shall be entitled to an injunction restraining Employee from such breach. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies for such breach or threatened breach. -26 10. Termination. (a) Death or Disability. This Agreement shall terminate automatically upon Employee's death. The Company may terminate this Agreement, after having established Employee's Disability (pursuant to the definition of "Disability" set forth in the disability insurance policy referred to in paragraph 3(c)(ii) hereof), by giving to Employee written notice of its intention to terminate Employee's employment hereunder. In such a case, Employee's employment hereunder shall terminate effective on the date on which he becomes entitled to benefits under the above-referenced disability insurance policy (which date shall be the Date of Termination pursuant to paragraph 10(e) hereof). (b) Cause. The Company may terminate Employee's employment under this Agreement for "Cause." For purposes of this Agreement, "Cause" means: (i) Failure of Employee to perform his obligations under paragraph 4 of this Agreement, which failure is demonstrably willful and deliberate on Employee's part after (A) a demand for performance is delivered in writing to Employee by the Chief Executive Officer of the Company which specifically identifies the manner in which the Chief Executive Officer believes that Employee has so failed, and (B) a reasonable period during which Employee may cure such failure; or (ii) Conviction of a felony involving a crime against the Company and material injury to the property or business of the Company. Provided that, prior to the termination of Employee's employment under this sub-paragraph (b), the Company's Board of Directors shall give Employee notice of the Company's intention to terminate Employee's employment, which notice shall include a statement of the grounds for such termination and the specific provision of this Agreement providing such grounds, and Employee shall have an opportunity to be heard by the Company's Board of Directors at a special meeting thereof to be held within 10 days after notice is given as required hereunder. (c) Termination by Employee After a Change in Control. Employee's employment under this Agreement may be terminated by Employee at any time within a year after a Change in Control upon fifteen (15) days prior written notice from Employee to the Company. For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred: (i) If any person other than Lawrence J. Fox, including a "group" as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act") (but excluding Employee or any group of which Employee is a member), becomes the beneficial owner, directly or indirectly, of 33% or more of the combined voting power of the Company's -27- outstanding voting securities ordinarily having the right to vote for the election of directors of the Company; (ii) If individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Board" generally and as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board (other than election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; (iii)Upon the occurrence of a transaction which requires shareholder approval and results in the acquisition of the Company by an entity other than a subsidiary of the Company through purchase of assets, by merger, or otherwise; or (iv) Upon the removal of Employee from, or the failure of the Company's shareholders to re-elect Employee to, the Board against his will (which is evidenced by written notice from Employee to the Board within thirty (30) days after such removal or failure to re-elect) other than as a result of Employee's death, disability, or termination for Cause. Notwithstanding the foregoing, Employee agrees that, upon the written request of the Company delivered to Employee within five (5) business days after a Change in Control, Employee agrees to continue to be employed by the Company under the terms of this Agreement for a period of at least one hundred and eighty (180) days after such Change in Control, but thereafter may exercise his rights under Paragraph 10 (c) above. (d) Notice of Termination. Any termination by the Company for Cause or by Employee at any time after a Change in Control shall be communicated by Notice of Termination to the other party hereto given in accordance with paragraph 14 of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date. -28- (e) Date of Termination. The term "Date of Termination," as used in this Agreement, means, as applicable: (i) the date of Employee's death or the date on which he becomes entitled to disability insurance benefits, (ii) the date of receipt of a Notice of Termination or any later date specified therein (which date shall be not more than 15 days after the giving of such notice) or (iii) at the end of the Original Term or any Extended Term if either the Company or Employee has given notice in accordance with paragraph 2 hereof. If Employee's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies Employee of such termination. If Employee's employment is terminated by Employee after a Change in Control, the Date of Termination shall be the fifteenth (15th) day after Employee notifies the Company of such termination. If Employee's employment is terminated by Employee other than after a Change in Control, the Date of Termination shall be the date on which Employee notifies the Company of such termination. (f) Compensation Upon Death or Disability, Termination for Cause, or Resignation More Than One Year After a Change in Control. If Employee's employment is terminated during the Original Term or any Extended Term, by reason of his death or Disability, by the Company for Cause, or by Employee more than one (1) year after a Change in Control, or if the Term of this Agreement is not extended at the end of the Original Term or any Extended Term, then the Company shall pay to Employee (i) his Base Salary through the Date of Termination at the rate then in effect, and (ii) bonus compensation as provided under paragraph 3(b) above on a pro rata basis to the extent that the Company has achieved its annual targets and objectives as referenced thereunder as of the Date of Termination, and the Company shall have no further obligation to Employee under this Agreement; provided, that the Company shall not be relieved of its obligation to make any payments to which Employee (or, if applicable, his spouse, beneficiaries or estate) is entitled under any pension, deferred compensation or employee benefit plan or plans of the Company or under any other agreement (which payments shall be made in accordance with the terms of any such plan or agreement). (g) Compensation Upon Termination Without Cause or Termination Within One Year After a Change in Control. If, during the Original Term or any Extended Term of this Agreement, the Company shall terminate Employee's employment other than for Cause or Disability, or if Employee shall terminate his employment with the Company within one (1) year after a Change in Control, then: (i) In addition to any and all amounts due and payable by the Company to Employee through the Date of Termination pursuant to paragraph 3 (a) of this Agreement, the Company shall immediately pay to Employee in a lump sum in cash the aggregate of the following amounts: (A) if the Date of Termination is on or prior to the first anniversary of the effective date of this Agreement, an amount equal to two times the Employee's annual Base Salary as of the Date of Termination; or, if the Date of Termination is subsequent to the first anniversary of the -29- effective date of this Agreement, an amount equal to the Employee's annual Base Salary as of the Date of Termination; and (B) an amount equal to the highest bonus earned by Employee pursuant to paragraph 3(b) hereof with respect to any fiscal year of the Company ending prior to the Date of Termination; and (C) In the event any payments to Employee under this paragraph 10(g) are determined to be subject to the tax (the "Excise Tax") imposed by ss.4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any similar federal or state excise tax, an amount (the "Gross-Up Payment") necessary for the net amount retained by Employee after payment of any Excise Tax imposed as a result of payments and benefits provided under this paragraph 10(g), including the Gross-Up Payment itself, to be equal to the sum of the amounts provided in paragraphs 10(g)(i)(A) and (B), above. For purposes of determining whether any of the payments and benefits provided under this paragraph 10(g) will be subject to the Excise Tax and the amount of such Excise Tax: (1) Any other payments or benefits received or to be received by Employee in connection with a Change in Control or the termination of employment (whether pursuant to the terms of this Agreement or of any other plan, arrangement or agreement with the Company) shall be treated as "parachute payments" within the meaning of ss.280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of ss.280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and acceptable to Employee, other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of ss.280G(b)(4) of the Code; (2) The amount of the payments and benefits which shall be treated as subject to the Excise Tax shall be equal to the lesser of (i) the total amount of the payments and benefits provided under this paragraph 10(g) or (ii) the amount of excess parachute payments within the meaning of ss.ss.280G(b)(1) and (4) after applying paragraph 10(g)(i)(C)(1), above); and (3) The value of any noncash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of ss.ss.280G(d)(3) and (4) of the Code. -30- If the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of employment, Employee shall repay to the Company, at the time the reduction in the Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction. If the Excise Tax is determined to exceed the amount taken into account hereunder at the time of termination of employment, the Company shall make an additional Gross-Up Payment to Employee in respect of such excess at the time such excess is finally determined. (ii) The Company shall, promptly upon submission by Employee of supporting documentation, pay or reimburse to Employee all costs and expenses paid or incurred by Employee prior to the Date of Termination which would have been payable under paragraph 3(c) if Employee's employment had not terminated; (iii)For a period ending on the second anniversary of the Date of Termination, or on such earlier date as Employee shall become employed elsewhere, Employee shall continue to be treated as a key employee for purposes of the plans, programs and policies of the Company described in paragraph 3(c)(i), (ii), (v), and the Company shall continue to provide benefits and to accrue service credits to or for the benefit of Employee and/or Employee's family at least equal to those which would have been provided or accrued, as the case may be, in accordance with the plans, programs and policies referred to in paragraph 3(c)(i), (ii), (v), and (vi), if Employee's employment had not been terminated; and (iv) If, despite the provisions of paragraph 10(g)(iii) above, benefits or service credits shall not be available under any of the plans, programs, or policies of the Company because Employee is no longer an employee of the Company, the Company itself shall, to the extent necessary, pay or provide for payment of benefits to Employee and/or Employee's family, or, where applicable, pay or provide to Employee and/or Employee's family the difference between the benefits payable pursuant to paragraph 10(g)(iii) above and the benefits payable pursuant to the terms of such plans, programs, and policies, in each case at the time such payments would be payable pursuant to the terms of such plans, programs and policies and taking into account, where appropriate, the service credits deemed accrued pursuant to paragraph 10(g)(iii). 11. Enforcement Costs. The Company is aware that, upon the occurrence of a Change in Control, the Board or a shareholder of the Company, or the Company's successor in interest, may then cause or attempt to cause the Company to institute, or may institute, litigation seeking to have this Agreement declared unenforceable, or may take, or attempt to take, other court action to deny Employee the benefits intended under this Agreement. If following a Change in Control the Company, the Board, a shareholder of the Company or the Company's successor in interest institutes any litigation or other court action designed to -31- deny, diminish or recover from Employee the benefits intended to be provided to Employee hereunder, and Employee retains counsel to represent Employee in connection with the defense of any such litigation or other court action, in the event that Employee prevails on the merits in any such litigation or court action, the Company shall pay or reimburse Employee for the reasonable fees and expenses of counsel retained by Employee to defend Employee in any such litigation or court action. Such payment or reimbursement shall be made by the Company in advance of the final disposition of such litigation or court action on a regular, periodic basis upon presentation by Employee of a statement or statements prepared by Employee's counsel in accordance with its customary practices, provided that Employee first agrees, in writing, to repay to the Company all amounts so paid or reimbursed in respect of any claim, issue or other matter asserted in such action, suit or proceeding in defense of which he shall not have been successful on the merits. 12. Stock Options. (a) As separate consideration for entering into this Employment Agreement, and especially as consideration for Employee's obligations under paragraphs 6, 7, 8, 9 and 16 hereof, the Company agrees to grant to Employee an option (the "Option") to purchase up to 200,000 of the Company's common shares pursuant to a new non-qualified stock option plan to be adopted by the Board of Directors of the Company (the "New Plan"). The Option will be granted within fourteen (14) days after execution of this Agreement or approval of the New Plan by the Company's Board of Directors, whichever occurs later. The price per share at which Employee will be entitled to purchase the Company's common shares under the Option shall be $7.625 (seven and five-eighths dollars) per share. The Option will become exercisable in four (4) equal installments on each of the first through the fourth anniversaries of July 5, 1995 (July 5, 1996, 1997, 1998, and 1999) and, notwithstanding such vesting schedule, will become immediately vested in full and exercisable in the event that Employee's employment is terminated by the Company other than for Cause or by Employee within one year after a Change in Control, except that the Option shall not be exercisable during the first six (6) months after the date it is granted. Following termination of Employee's employment for any reason except by the Company for Cause, the Option will remain exercisable according to its terms (subject to accelerated vesting of the Option as described in the preceding sentence) for a period of 90 days following such termination or, if sooner, until the expiration of the original term of the Option. The Option will have such other terms and be subject to such other conditions, not inconsistent with the terms and conditions of this Agreement, as the Committee administering the New Plan shall determine. (b) If the Company achieves a ten percent (10%) pre-tax profit margin for its 1996 fiscal year, the Company agrees to grant to Employee an additional option (the "Additional Option") to purchase up to seventy thousand (70,000) of the Company's common shares pursuant to the Symix Systems, Inc. Non-Qualified Stock Option Plan for Key Employees (the "Plan") at one hundred percent (100%) of the Fair Market Value of the shares on the date on which the Additional Option is granted (which date will be not later than thirty (30) days after the date of publication of quarterly and annual summary statements of sales and earnings for the fiscal 1996 fourth quarter and year); provided Employee remains employed by the Company hereunder through the end of the Company's 1996 fiscal year. The Additional Option will become exercisable in four (4) equal installments on each of the first through the fourth anniversaries of -32- the grant date for the Additional Option and, notwithstanding such vesting schedule, will become immediately vested in full and exercisable in the event that Employee's employment is terminated by the Company other than for Cause or by Employee within one year after a Change in Control. Following termination of Employee's employment for any reason except by the Company for Cause, the Additional Option will remain exercisable according to its terms (subject to accelerated vesting of the Additional Option as described in the preceding sentence) for a period of 90 days following such termination or, if sooner, until the expiration of the original term of the Option. The Additional Option will have such other terms and be subject to such other conditions, not inconsistent with the terms and conditions of this Agreement, as the Committee administering the Plan shall determine. (c) Employee hereby expressly agrees that Employee's receipt of the Option, whether or not any Additional Option is ever granted, is sufficient consideration to require him to be bound by the provisions of paragraphs 6, 7, 8, 9 and 16 hereof. Employee also recognizes and acknowledges that his execution of this Agreement was a condition precedent to the Company's agreement to grant the Option and Additional Option to him; that is, the Company would not have agreed to grant the Option and Additional Option to Employee but for the execution of this Agreement. Employee recognizes, acknowledges and agrees that nothing contained in this paragraph 12, including but not limited to the Company's agreement to grant the Additional Option, shall be construed or interpreted to extend the Term of this Agreement beyond that provided by paragraphs 2 and 10 hereof. 13. Litigation Assistance. Employee covenants and agrees that he shall, upon reasonable notice, during the Term of his employment with the Company under this Agreement and for three full years after the expiration or termination thereof, furnish such information and proper assistance to the Company as may be reasonably required by the Company in connection with any litigation in which it is, or may become, a party unless the furnishing of such information or assistance will unreasonably interfere with Employee's employment with a third party or other business activities. The Company shall reimburse the Employee for all reasonable out-of-pocket expense incurred by him in furnishing such information and assistance. 14. Notices. Any notice or other communication required or desired to be given to any party under this Agreement shall be in writing and shall be deemed given when either delivered personally to that party or deposited in the United States mail, first-class postage prepaid, addressed to that party at, or delivered to, the address specified below: (a) If to the Company: Symix Systems, Inc. 2800 Corporate Exchange Drive Columbus, Ohio 43231 Attention: Lawrence J. Fox, Chairman With a copy to: -33- Vorys, Sater, Seymour and Pease 52 East Gay Street Columbus, Ohio 43215 Attention: Ivery D. Foreman, Esq. (b) If to Employee: Stephen A. Sasser 2407 Tremont Upper Arlington, Ohio 43221 With a copy to: Baker & Hostetler 65 East State Street Suite 2100 Columbus, Ohio 43215 Attention: Ronald G. Linville, Esq. 15. Nonwaiver of Breach. No failure by any party to insist upon strict compliance with any term of this agreement, to exercise any option, to enforce any right, or to seek any remedy upon any default of any other party shall affect, or constitute a waiver of, the first party's right to insist upon such strict compliance, exercise that option, enforce that right, or seek that remedy with respect to that default or any prior, contemporaneous, or subsequent default; nor shall any custom or practice of the parties at variance with any provision of this agreement affect, or constitute a waiver of, any party's right to demand strict compliance with all provisions of this agreement. 16. Ohio Law to Govern. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Ohio. Any action, suit or proceeding in respect of or arising out of this Agreement or the transactions contemplated hereby shall be prosecuted as to any one or more of the parties hereto at Columbus, Ohio. EACH PARTY HERETO JOINTLY AND SEVERALLY CONSENTS AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER HIS OR ITS PERSON BY ANY COURT SITUATED AT COLUMBUS, OHIO AND HAVING JURISDICTION OVER THE SUBJECT MATTER OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR IN RESPECT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. 17. Assignment. The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors of the Company and of Employee's personal representatives or, in the case of Employee's death, his heirs, and may be assigned, for all or any part of the Term hereof, by the Company to any corporation (a) which at the time controls the capital stock of the Company, (b) which succeeds to substantially all of the assets of the Company, or (c) the controlling voting shares of which are at the time owned by the -34- Company. In the event of such assignment, any and all references to the "Company" in other paragraphs of this Agreement shall be deemed to mean and include such assignee corporation. The Employee may not assign this Agreement, or any part hereof, to any other person without the prior written consent of the Company. 18. Entire Agreement. This instrument contains the entire agreement of the parties relating to Employee's employment by the Company and it supersedes all prior agreements or understandings, written or oral, with respect to such subject. It may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. 19. Severability. The intention of the parties to this Agreement is to comply fully with all laws and public policies, and this Agreement shall be construed consistently with all laws and public policies to the extent possible. If and to the extent that any court of competent jurisdiction determines that it is impossible or violative of any legal prohibition to construe any provision of this Agreement consistently with any law, legal prohibition, or public policy and consequently holds that provision to be invalid or prohibited, such holding shall in no way affect the validity of the other provisions of this Agreement, which shall remain in full force and effect. 20. Captions. The captions of the various sections of this Agreement are not part of the context of this Agreement, but are only labels to assist in locating those sections, and shall be ignored in construing this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first hereinabove written. SYMIX SYSTEMS, INC. By _____________________________________ Lawrence J. Fox Chairman and Chief Executive Officer Date: ______________________________ EMPLOYEE _____________________________________ Stephen A. Sasser Date: ______________________________ -35- EX-10.3 4 Exhibit 10(c) SYMIX SYSTEMS, INC. STOCK OPTION AGREEMENT This Agreement, made and entered into as of January 17, 1996, by and between Symix Systems, Inc., an Ohio corporation (sometimes hereinafter called the "Company") and Stephen A. Sasser (sometimes hereinafter called the "Optionee"), W I T N E S S E T H: WHEREAS, the Board of Directors of the Company has adopted the Symix Systems, Inc. Non-Qualified Stock Option Plan for Key Executives (sometimes hereinafter called the "Plan") and, pursuant to the Plan, has appointed a Committee (sometimes hereinafter called the "Committee") to administer the Plan; and WHEREAS, the Committee has determined that an option to acquire Common Shares under the Plan should be granted to the Optionee upon the terms and conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein, the parties hereto make the following agreement, intending to be legally bound hereby; (1) Grant of Option. The Company hereby grants to the Optionee an option (sometimes hereinafter called the "Option") to purchase two hundred thousand (200,000) Common Shares of the Company. (2) Option Price. The purchase price (sometimes hereinafter called the "Option Price") to be paid by the Optionee to the Company upon the exercise of the Option shall be Seven and 62.5/100 Dollars ($7.625) per share. -36- (3) Option Term. (a) The Optionee may exercise the Option, from time to time and at any time, in accordance with the following vesting schedule and during the period commencing on the date first above written and expiring at midnight on the tenth (10th) anniversary of the date first above written (said period of time sometimes hereinafter called the "Option Period"): Vesting Schedule 25% vested 50% vested 75% vested 100% vested as of 7/5/96 as of 7/5/97 as of 7/5/98 as of 7/5/99 ------------ ------------ ------------ ------------ Total Number Number of Number of Number of Number of of Shares Shares Shares Shares Shares ------------ --------- --------- --------- --------- 200,000 50,000 100,000 150,000 200,000
Notwithstanding the foregoing, and subject to Paragraphs 3(b) and 3(c) hereof, the Option shall not vest with respect to any additional Common Shares of the Company on or after the date on which the Optionee shall no longer be an employee of the Company. (b) Change in Control. (i) Anything contained in this Agreement or elsewhere to the contrary notwithstanding, in the event of a Change in Control (as defined below) of the Company, the Option granted hereunder immediately shall become vested in full and fully exercisable if Optionee's employment with the Company is terminated by Employee within one year after the Change in Control whether or not then exercisable. (ii) For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred : -37- (1) If any person other than Lawrence J. Fox, including a "group" as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act") (but excluding Optionee or any group of which Optionee is a member), becomes the beneficial owner, directly or indirectly, of 33% or more of the combined voting power of the Company's outstanding voting securities ordinarily having the right to vote for the election of directors of the Company; (2) If individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Board" generally and as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board (other than election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; (iii)Upon the occurrence of a transaction which requires shareholder approval and results in the acquisition of the Company by an entity other than a subsidiary of the Company through purchase of assets, by merger, or otherwise; or -38- (iv) Upon the removal of Optionee from, or the failure of the Company's shareholders to re-elect Optionee to, the Board against his will (which is evidenced by written notice from Optionee to the Board within thirty (30) days after such removal or failure to re-elect) other than as a result of Optionee's death, disability, or termination for "Cause" (as defined herein). For purposes of this Agreement, "Cause" has the same meaning as ascribed to it in the Employment Agreement effective July 5, 1995 between the Company and Optionee (the "Employment Agreement"). (c) Automatic Vesting of Option Upon Death or Disability, Termination of Optionee's Employment By The Company Except For Cause. (i) Anything contained in this Agreement or elsewhere to the contrary notwithstanding, in the event Optionee dies or becomes Disabled (based on the definition of "Disability referred to in paragraph 3(c)(ii) below) or Optionee's employment with the Company is terminated by the Company other than for Cause, the Option granted hereunder immediately shall become vested in full and fully exercisable as of the date of Optionee's death or Disability or such termination, whether or not then exercisable. (ii) For purposes of this Agreement, "Disability" shall have the same meaning ascribed to it in the Employment Agreement. (4) Exercise of Option: Payment. The Option may be exercised prior to its expiration only by: (a) The Optionee; or -39- (b) If a fiduciary is appointed by a court to administer the estate of the Optionee during his lifetime by reason of the physical or mental disability of the Optionee, by such court-appointed fiduciary; or (c) In case of the death of the Optionee prior to the expiration of the Option, by the court-appointed fiduciary administering the estate of the Optionee. Any person entitled to exercise the Option may exercise the Option by giving notice of such exercise to the Company stating the number of Common Shares subject to the Option in respect of which it is being exercised, accompanied by a check or cash in full payment of the total Option Price for such Common Shares. Notwithstanding the foregoing, the Option shall not be exercisable during the first six (6) months after the date that the Option is granted except in the case of death or disability of the Optionee. (5) Adjustment. In the event of any stock dividend, stock split up, combination or other change (by amendment of the certificate of incorporation, merger or otherwise) in respect of the Common Shares of the Company prior to the expiration of the Option, the number of Common Shares thereafter subject to the Option and/or the Option Price therefor shall be adjusted to be such number and/or price to reflect appropriately each such change. (6) Delivery of Share Certificates. In case the Option is exercised by the Optionee from time to time or at any time, the Company shall, within five (5) business days after receipt of such notice (or, if counsel to the Company shall require any securities and/or blue sky laws compliance prior to such issuance, as promptly thereafter as is reasonably practicable), take -40- all such action as is necessary to request the transfer agent to have delivered appropriate share certificates evidencing the Common Shares purchased upon such exercise of the Option. (7) Termination of Option. Anything contained in this Agreement or elsewhere to the contrary notwithstanding, the Option (and all of the rights of the Optionee under this Agreement) shall expire and terminate: (a) Immediately upon the termination for Cause of the Optionee by the Company; (b) On the ninetieth (90th) calendar day next following the first date when the Optionee shall no longer be an employee of the Company for reasons other than a for Cause termination (but in no event after the expiration of the Option Period); or (c) On the ninetieth (90th) calendar day next following the date of death of the Optionee (but in no event after the expiration of the Option Period). (d) For purposes of this Agreement, "Cause" shall have the same meaning as assigned to it under the Employment Agreement. (8) Restrictions on Transfer of Shares. Anything contained in this Agreement or elsewhere to the contrary notwithstanding: (a) The Option shall not be exercisable for the purchase of any Common Shares subject thereto except for: (i) Common Shares subject thereto which at the time of such exercise and purchase are registered under the Securities Act of 1933, as amended (the "Act") or which, upon the completion of such exercise, would be issued in a transaction exempt from registration under the Act; and -41- (ii) Common Shares subject thereto which at the time of such exercise and purchase are exempt or are the subject matter of an exempt transaction, are registered by description, by coordination, or by qualification, or at such time are the subject matter of a transaction which has been registered by description, all in accordance with Chapter 1707 of the Ohio Revised Code, as amended; and (iii)Common Shares subject thereto in respect of which the laws of any state applicable to such exercise and purchase have been satisfied. (b) If any Common Shares subject to the Option are sold and transferred upon the exercise thereof to a person who (at the time of such exercise and transfer or at any time thereafter) controls, is controlled by or is under common control with the Company, or are sold and transferred in reliance upon an exemption claimed in respect of the Act, then upon such sale and transfer: (i) Such Common Shares shall not be transferable by the holder thereof, and neither the Company nor its transfer agent or registrar, if any, shall be required to register or otherwise to give effect to any transfer thereof and may prevent any such transfer, unless the Company shall have received an opinion from its counsel to the effect that any such transfer would not violate the Act or the applicable laws of any state; and (ii) The Company shall cause each share certificate evidencing such Common Shares to bear a legend reflecting applicable restrictions on the transfer thereof. (c) Nothing contained in this Agreement or elsewhere shall be construed to require the Company to take any action whatsoever to eliminate the restrictions imposed by this -42- paragraph (8) of this Agreement upon the exercise of the Option or upon the transfer of Common Shares purchased upon the exercise of the Option. (9) Notices and Payments. All payments required or permitted to be made under the provisions of this Agreement, and all notices and other communications required or permitted to be given or delivered under this Agreement to the Company or to the Optionee, which notices or communications must be in writing, shall be deemed to have been given if delivered by hand, or mailed by first-class mail (postage prepaid), addressed as follows: (a) If to the Company, to: Symix Systems, Inc. ATTN: Chief Financial Officer 2800 Corporate Exchange Drive Columbus, OH 43231 (b) If to the Optionee, to the address of the Optionee set forth at the conclusion of this Agreement. The Company or the Optionee may, by notice given to the other in accordance with this Agreement, designate a different address for making payments required or permitted to be made, and for the giving of notices or other communications, to the party designating such new address. Any payment, notice or other communication required or permitted to be given in accordance with this Agreement shall be deemed to have been given when placed in the U.S. Mail, addressed and mailed as provided in this Agreement. (10) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. (11) Rights and Remedies Cumulative. All rights and remedies of the Company and of the Optionee enumerated in this Agreement shall be cumulative and, except as expressly -43- provided otherwise in this Agreement, none shall exclude any other rights or remedies allowed at law or in equity, and each of said rights or remedies may be exercised and enforced concurrently. (12) Duplicate Originals. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be a duplicate original, but all of which, taken together, shall be deemed to constitute a single instrument. (13) Captions. The captions contained in this Agreement are included only for convenience of reference and do not define, limit, explain or modify this Agreement or its interpretation, construction or meaning and are in no way to be construed as a part of this Agreement. (14) Severability. If any provision of this Agreement or the application of any provision thereof to any person or any circumstance shall be determined to be invalid or unenforceable, then such determination shall not affect any other provision of this Agreement or the application of said provision to any other person or circumstance, all of which other provisions shall remain in full force and effect, and it is the intention of each party to this Agreement that if any provision of this Agreement is susceptible of two or more constructions, one of which would render the provision enforceable and other or others of which would render the provision unenforceable, then the provision shall have the meaning which renders it enforceable. (15) Number and Gender. When used in this Agreement, the number and gender of each pronoun shall be construed to be such number and gender as the context, circumstances or its antecedent may require. -44- (16) Entire Agreement. This Agreement constitutes the entire Agreement between the Company and the Optionee in respect of the subject matter of this Agreement, and this Agreement supersedes all prior and contemporaneous Agreements between any party hereto in connection with the subject matter of this Agreement. No officer, employee or other servant or agent of the Company, and no servant or agent of the Optionee, is authorized to make any representation, warranty or other promise not contained in this Agreement. No change, termination or attempted waiver of any of the provisions of this Agreement shall be binding upon any party hereto unless contained in a writing signed by the party to be charged. (17) Non-Transferable: Successors and Assigns. The Option shall not be transferable by the Optionee other than by will or by the laws of descent and distribution and the Option may not be exercised during the lifetime of the Optionee except by him or by his court-appointed fiduciary. This Agreement shall inure to the benefit of and be binding upon the successors and assigns (including successive, as well as immediate, successors and assigns) of the Company. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written. Company: Optionee: SYMIX SYSTEMS, INC. STEPHEN A. SASSER. By: ______________________________ _________________________________ Lawrence J. Fox Stephen A. Sasser Its: Chief Executive Officer 2407 Tremont Road Arlington, Ohio 43221 (614) 523-7190 Social Security Number: -45- EX-11 5 Exhibit 11 Statement Re Computation of Per Share Earnings SYMIX SYSTEMS, INC. COMPUTATION OF PER SHARE EARNINGS (In Thousands, Except Per Share Data) Three Months Ended Nine Months Ended March 31, March 31, 1996 1995 1996 1995 ---- ---- ---- ---- Primary: Average Shares Outstanding .......... 2,739 2,696 2,731 2,748 Net effect of dilutive stock options based on the treasury stock method 118 0 55 0 ------ ------- ------ ------- Total .................... 2,857 2,696 2,786 2,748 ====== ======= ====== ======= Net Income .......................... $ 645 $ 199) $1,560 ($ 794) ====== ======= ====== ======= Per Share Amount .................... $ 0.23 ($ 0.07) $ 0.56 ($ 0.29) ====== ======= ====== ======= Fully dilutive effect of stock options on per share amounts for the three months and nine months ended March 31, 1996 and 1995, has not been presented since any reduction of less than 3% in the aggregate need not be considered as dilution. -46- EX-27 6
5 This schedule contains summary financial information extracted from Symix Systems, Inc. Form 10-Q for the period ended March 31, 1996 and is qualified in its entirety by reference to such financial statements. 1000 9-MOS JUN-30-1996 MAR-31-1996 6,393 0 10,402 502 446 17,606 10,984 6,109 28,394 10,569 0 0 0 29 16,327 28,394 17,177 32,555 4,839 11,125 18,990 (48) 34 2,601 1,041 1,560 0 0 0 1,560 0.56 0.00
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